Asia stocks fall despite Mnuchin's weekend triage

Daniel Fowler
December 26, 2018

By Saleha Mohsin and Ros Krasny Treasury Secretary Steven Mnuchin called top executives from the six largest United States banks over the weekend, he said Sunday on Twitter, a move that followed heavy losses in the stock market last week and a partial federal government shutdown.

Mnuchin is also expected to hold a call with the President's Working Group on financial markets, which the treasury secretary chairs. the PWG includes the Federal Reserve's Board of Governors, the CFTC, and the SEC, and the key group of regulators are expected to discuss how to coordinate continued normal market operations.

A statement by Mnuchin on Sunday about his conversation with the banks and plans to convene the so-called Plunge Protection Team "was not especially comforting, however, given that investors had not generally been questioning market functioning in recent days, despite large declines", Nick Bennenbroek, currency strategist at Wells Fargo in NY, wrote in a note to clients. He said the executives assured him their banks are healthy and have "ample liquidity" to lend to consumers and businesses.

Mr Mnuchin "also confirmed that they have not experienced any clearance or margin issues and that the markets continue to function properly", the Treasury said.

The Treasury Department added that Mnuchin would convene a working group on financial markets on Monday.

The Post and other outlets reported that Trump even considered taking the unusual step of firing Federal Reserve Chairman Jerome Powell after he raised interest rates against Trump's advice, but Mnuchin denies the rumors, reportedly at Trump's request.

Mr Mnuchin's calls to the bankers came amid a partial government shutdown that began on Saturday following an impasse in Congress over Mr Trump's demand for more funds for a wall on the border with Mexico.

China opposes release of detained Canadians
August 22: A NY court issues a warrant for the arrest of Huawei Technologies chief financial officer Meng Wanzhou . December 19: Global Affairs Canada says a third Canadian has been detained in China.

Mick Mulvaney, President Donald Trump's incoming acting chief of staff, on Sunday predicted the shutdown could continue into 2019.

Joining Mnuchin on Monday's call were officials from the Fed, the Securities and Exchange Commission, the Commodity Futures Trading Commission, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency.

Worries about slowing economic growth and rising interest rates saddled the US market with its worst week in more than seven years.

"We're in a turbulent time and it will be interesting to see how we end the year".

The S&P 500 index was down 65.52 points at 2,351.10, while the Nasdaq composite was down 140.07 points at 6,192.92. The Nasdaq is in a bear market.

Corporate credit markets have been under duress as well, and measures of the investment grade corporate bond market are poised for their worst yearly performance since the 2008 financial crisis.

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